How will Utah's landmark private equity deal work?
College Football Enquirer co-hosts Andy Staples, Ross Dellenger and Steven Godfrey discuss the new agreement between the university and Otro Capital that will split the athletic department from the school - and could generate around $500 million for the Utes. Check out the full conversation on the “College Football Enquirer” podcast - and subscribe on Apple Podcasts , Spotify , YouTube or wherever you listen.
Video Transcript
The University of Utah has accepted a P.E.
deal.
For its athletic department, I'll let you fill us in on the exact details of that Because I am, I am fascinated and have many, many questions.
Utah has been in negotiations for probably a year or more with Otro Capital Doing a deal where they basically break out their athletic department and make it A private, for-profit entity outside of the umbrella of the university.
Basically everything in the current Athletic Department.
Um, ticket sales, the sports teams themselves, all these things move under this new law Athletic department called Utah Brand and Entertainment, uh, LLC, and, um, obviously the revenues will be split, Right?
It's a shared ownership of the entity.
So the revenues will be split between Otro Capital and the University of Utah.
That's where Otro, you would think, will get its.
Principal investment bank.
So it's principal; I don't know the exact number of the cash infusion.
But it's probably well over $100 million.
And then another interesting wrinkle here.
Is that a group of really small size, like prominent donors having the ability to Buy a stake in the new firm.
Entity in the new Athletic Department.
Its kind of like the Green Bay Packers do.
So youre basically buying a board seat, right?
You know, not necessarily.
The, um, board will be made up of Otro Executives, Mark Harlan, the athletic director, and some of the trustees.
Uh, I mean, Id be surprised, yeah, Andy, if there werent a few of those big donors and Boosters that are, are on there.
Uh, people probably listening wonder Like what?
Why would they do something like this?
Well, obviously, they want a cash infusion to help in finding the financial issues at hand.
Everyone's having fun.
Two Otro Otro Capital executives will come in And they'll create this new business, and they'll be charged with generating revenue.
Ways that maybe we haven't been used to.
Uh, and number three, it gives them flexibility, I guess, because they're not under a A public university, not bound by red tape, I don't have to face the usual hurdles of a Public university.
So, those are kind of all the issues.
